When Keynesian equilibrium is present,
A) aggregate demand for goods and services will equal the current rate of output.
B) business inventories will be increasing.
C) full employment must be present.
D) the actual rate of unemployment must equal the natural rate of unemployment.

Question

Quizplus · Accepted Answer

When Keynesian equilibrium is present, aggregate demand for goods and services will equal the current rate of output. This means that the economy is producing the amount of goods and services that consumers are willing to buy at the current price level. Business inventories and full employment are not necessarily related to Keynesian equilibrium, and the actual rate of unemployment may or may not equal the natural rate of unemployment.

When Keynesian Equilibrium Is Present